Couple has crafted a unique beer business model

Belmont owners widen horizons

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Kate Baker (left) and Suzanne Schalow are creating a national franchise of specialty beer stores.

By Gary DzenGlobe Staff
December 23, 2013

Kate Baker and Suzanne Schalow founded Craft Beer Cellar in Belmont in 2010, and today, at any given time, its 1,500 square feet of retail space are filled with more than 1,000 beers from 350 breweries. Beers are organized by region, from Worcester to the West Coast, with an emphasis on local brews. Employees have jobs like Head Beer Geek, Ambassador of Fine Ales and Lagers, and Hoptologist and wear hooded sweat shirts emblazoned with the words “Beer Geek.”

“People take two steps in the door and they don’t know how to proceed,” says Brian Shaw, who opened a Craft Beer Cellar in Newton Centre recently, joining franchises in Winchester, Westford, and Braintree. “People say, ‘Oh my God, I didn’t know there was this much beer.’ ”

Is there ever. And now Baker and Schalow are betting their model can work elsewhere as they expand to New Hampshire and Vermont, as well as Florida, St. Louis, and maybe Seattle. Their goal is to make people think about whether to buy a Pretty Things Jack D’Or or a Sierra Nevada Pale Ale as carefully as they would wrestle between a cabernet or a merlot.

It is a risky quest. Despite craft beer’s popularity boom, creating a national franchise of specialty beer stores has not been done. One reason could be that craft beers accounted for only 10 percent of the dollars in total beer sales in the United States in 2012.

Dina Rudick/Globe Staff

Craft Beer Cellar stores carry flavorful ales and lagers that are brewed to traditional standards and can be hard to find.

Baker and Schalow prefer to focus on other numbers, like the 2,403 brewers that operated in the United States in 2012, the most since the 1880s, according to the Brewers Association. Schalow and Baker hope to capitalize on this explosion by packing each small, service-oriented store with carefully curated beer while leaving out nips, cigarettes, and jugs of wine.

“Beer store is still not a ‘category’ in the world,” says Schalow. “No one has done this. No one has put everything on the line and said, ‘I can teach people about great beer.’ ”

Schalow and Baker, partners in life as well as business, met in 2002 when Schalow, then a manager at Cambridge Common restaurant, hired Baker. The first beer Baker consumed in front of Schalow was a Budweiser.

“I almost fell over,” Schalow says.

Around that time, Schalow wanted to take Blue Moon, a MillerCoors product, off the bar’s tap list. When ownership said no, she challenged her staff to “sell the heck” out of something else, and Magic Hat’s Circus Boy, a craft beer, eventually replaced Blue Moon.

Baker and Schalow married in 2010, and the couple decided that year to leave the restaurant and open the beer store.

“When I told her craft beer store, she was a lot supportive and a little skeptical,” says Schalow. “I told her, ‘If we make it amazing, they will come, it doesn’t matter where it is.’ ”

The pair have scoured the region looking for craft beer from hard-to-find brewers. Stores carry multiple styles from brewers like Northampton’s Brewmaster Jack, Everett’s Night Shift Brewing, and Plymouth’s Mayflower Brewing, as well as beers from Belgium, Italy, and France.

Dina Rudick/Globe Staff

Brian Shaw, who opened a Craft Beer Cellar in Newton Centre recently, says business has been brisk.

“It’s all about building and cultivating the relationships,” says Baker. “And it could be with a distributor, or a bartender, or a homebrewer who has visions of creating their brewery.”

“They’re really in tune with the culture of craft beer,” says Mark Vasconcelos, craft brand manager for Burke Distributing, a Massachusetts company that delivers 37 craft brands to stores around the state, in addition to larger brands like Coors Light. “They’re proactive in letting us know if there’s something that’s going to be in demand by the consumers.”

Carrying 350 beer brands is not without challenges. “Beer is the least marked up drinkable thing,” Baker says. “There’s a reason why no one has done this before.”

A big reason is that light beer, in particular, remains hugely popular.

“We celebrate the beer renaissance currently taking place, and we are proud to offer beer drinkers a portfolio of great beers for every drinking occasion,” Karina Diehl, a spokeswoman for MillerCoors, said in a statement. “Light beer is the largest segment in the American beer industry for a reason.”

John Libonati and Chris Schutte own Social Wines in South Boston, which carries only premium beer, but also wine and spirits. They acknowledge the higher markups on wine make it easier to not carry the big-name beers.

“The growth of the craft beer market right now isn’t being fueled by people who only want beer,” says Jeff Wharton, cofounder of DrinkCraftbeer.com. “I think the world is ready for more liquor stores with a craft beer ethos.”

Craft beer, by definition, means small, independently owned, and brewed to traditional standards; it accounted for 6.5 percent of the volume of all beer sold in 2012, according to the Brewers Association. Schalow knows craft beer is not yet on everyone’s radar.

“We’re the crazy hippies with the headbands, screaming and shouting and carrying the torches,” she says.

To better reach the masses, the store has tried to engage potential customers through social media. Lee Movic, who runs Craft Beer Cellar’s social media accounts, positions himself as an advocate for craft beer, not just the store. Movic attends events, even for competing stores, pushing craft. He tweets about those events, new beer arrivals, and generally positive messages like, “Good morning, beer geeks. We hope you have a great day today.”

He is luring new customers the only way he knows how. “Everyone loves great customer service,” he says, “so we start with that.”

Franchising was not always the plan, says Baker. The pair spent “close to 50 hours” scouting store locations in St. Louis before hiring a real estate developer to help. They admittedly don’t know the Brandon, Fla., market as they know Belmont. Selecting new franchise sites and owners has taken them away from their base.

“The first couple months were humbly painful,” says Schalow. She says the store’s regular customers weren’t used to seeing them less.

Movic says the store’s brand is intrinsically linked to Baker and Schalow. “But it is already becoming much more than that,” he adds.

Despite early challenges, the owners — with a staff of about 30 people and growing — remain devoted to spreading their motto of “Don’t drink crap beer.” Schalow talks in great detail about educating her staff and the public (”If you can’t buy good beer from me, just buy good beer,” she says), and several staffers eagerly share their “a-ha” moments of talking dazed and confused customers “down from that scary place” and converting them into regulars.

Shaw, the Newton Centre store owner, says business has been brisk since the opening on Oct. 30. Kay Lorenz, one of the owners of the Braintree Craft Beer Cellar, says she has “been welcomed with open arms” by neighboring retailers. On a day in late November, a new 20-something employee introduced himself to Schalow on his first day.

“This is so much fun,” he says, his voice rising in pitch with excitement. “I just love working here!”